EU launches online gambling restrictions probe

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European Commission competition officials are crying foul over plans by some European states to restrict foreign sports betting and gambling services from operating in their countries.

Brussels is considering legal action against protectionist barriers planned by France, Italy, and Austria that effectively ban foreign online gaming and casino operators. In total, nine EU member states face possible action over the issue. Germany, the Netherlands, Hungary, Denmark, Finland, and Sweden are already under investigation.

Online gambling operations, hard hit by US moves to clamp down on online gambling that have included anti-gambling legislation and the arrest of key execs flying through the US, have welcomed the EU's stance. "We hope these new proceedings will put an end to the witch-hunts against private EU licensed operators," European Betting Association secretary general Didier Dewyn said.

As a first step in possible proceedings, EU commissioners are asking for governments to explain their policy on online gambling via an official request for information, The Guardianreports.

The move follows a barrage of complaints from online gambling firms to EU internal market commissioner Charlie McCreevy. Each government has two months to respond to questions asking how they reconcile their policies with EU laws that call for a free market in goods and services. Possible infringement proceedings may follow if governments are unable to satisfy Brussels that market regulations they have applied are "necessary, proportionate and non-discriminatory".

The EU's decision to launch an inquiry does not necessarily herald a push to liberalise gambling services. National monopolies might be allowed to operate providing member states can establish that this is in the public interest. A key ruling by the European Court of Justice said restrictions on online gambling need to be "consistent and systematic" so that limiting the market to prevent fraud or combat gambling addiction is lawful. A number of federal states within Germany have applied this ruling to restrict the online gambling market.

But Commissioner McCreevy questioned how France can block foreign competition on the basis of preventing addiction when its online gambling market has expanded to reach a turnover of €17bn a year. France has already been asked to amend an economic patriotism law enacted last year that restricts foreign investment in a range of industries including defence and sports betting.

Italy, which enacted barriers against online gambling in February, was warned that its measures were "disproportionate". UK-based Stanley Betting, which filed a suit complaining against these "protectionist measures" in February, welcomed the EU's investigation. ®